Releasing Equity

soley13

Morning!

Naive question perhaps.

I have two mortgages, BTL and Residential both at 75% LTV@ 100,000. They are only 6-12 months in.

Would I be able to release equity in one of these properties to put towards a deposit for another? Would my lender allow me to remortgage so soon?

Cheers

kingstreet

If you've only got 25% equity, you'll find you can probably raise no more than 10% on the residential and 5% on the BTL. Your lender can't stop you remortgaging, but given the likely fees involved eating into what little you can raise, it seems a little futile.

soley13

Thanks for the help, I see now like you say that there are probaly better ways to find the funds for a deposit.

I have ran into another problem on the BTL front however! Birmingham Midshires declined me on the basis of my credit score.

In the last four months I have opened a new bank account, two small credit agreements totalling no more than £800 and a credit searched carried out. This has wiped by credit score. Even though I have no Red Flags as such. (CCJ's/Defaults or missed payments) my score has dropped from 700 too 450.

I have £20,000 to invest now, and I have had an offer for a £74,000 property accepted. It will generate approx £650pcm.

My other mortgages are up to date and fine, like I say the flurry of activity has appeared to have killed my credit score!

What steps can I take?

Are there any lenders people are familiar with who will lend to individuals in my situation?

soley13

Any suggestions?

kingstreet

If you have a £20k cash deposit without mucking around remortgaging the others, talk to a whole market broker about a straight BTL mortgage for the purchase.

soley13

Thanks,

My current broker is classed as a whole market broker. Still waiting on her to find out if TMW will accept. What are the odds, I can provide 25-30% on a £74,000 property with monthly return of £500-600 rent.

Its just my !!!! poor credit rating (like i say there are no missed payments, ccj's or defaults or arrears!). Will lenders like TMW or Natwest look beyond that?

kingstreet

The deposit and the rent stack up alright. On the personal situation, only they can tell you the answer to that. If it doesn't work with TMW it might be worth leaving it for six months to put some of that recent credit activity back a bit.

Thrugelmir

soley13 wrote: »

Its just my !!!! poor credit rating (like i say there are no missed payments, ccj's or defaults or arrears!). Will lenders like TMW or Natwest look beyond that?

My also have something to with the fact that you obtained 2 mortgages in the past 12 months.

If you already have the deposit why are you looking to release equity already?

soley13

Well that was the original plan, to release equity and fund another BTL. However I have had a slight rethink and decided to use savings. Either way I'm at the stage where I need another BTL mortgage. Wanted to get a feel, see if any one else had come across sympathetic lenders?